"Every factory working with us improves performance 20-30%"

Annapurna sock factory / Photo: courtesy of the company

The Israel Innovation Authority Advanced Manufacturing Division has the mission of injecting innovation into Israel's traditional industries.

Your turn in the pharmacy queue comes up, and the pharmacist disappears behind the storage shelves. After a moment, he returns looking dispirited. Although the computer states that your medicine is in stock, it seems they’ve run out. If only the storage drawers could count the number of pharmaceuticals stored inside them, and notify the computer system. Things would be so much simpler, no?

Israeli company Pegasus Medical recently completed a trial at a hospital in Boston. Pegasus manufactures medical storage equipment: carts and modular shelves made of metal and plastic, including advanced shelves and drawers. Already in production is an electronic tracking and control system integrated into the equipment and designed to do just that: monitor inventory in real time, and transmit an updated delivery status to the cloud at any given time. This smart system began life at the Israel Innovation Authority (IAA) Advanced Manufacturing Division. Pegasus reports that "the first generation of the product is being launched following completion of a successful series of trials at a Boston hospital."

Pegasus, which is headquartered in Tel Aviv with a production plant in Kiryat Shmona, is one of about 600 companies that, since 2018, have benefited from the guidance and support programs operated by IAA's Advanced Manufacturing Division. In another case, a company called Elad Technologies, which designs, builds and operates industrial sewage facilities, has developed a camera that monitors the sewage separation process. The camera, installed in a specialized case, allows for uninterrupted photographing without being disturbed by lighting, reflections, or foam.

The aggregated images generate a database that an artificial intelligence system learns. The system is then able to distinguish between a "good" image and a "bad" image, i.e. to determine separation process quality in real time. Later on, the company hopes, the system will learn to identify the cause of a problem, and be able to instruct the facility's control system in how to address it.

Hundreds of millions for 600 ventures

The Advanced Manufacturing Division at the Innovation Authority was established in January 2018 with the aim of promoting innovation in Israeli industry by adopting innovative ways of thinking, or by integrating innovative technologies into the development and production processes. The focus is on companies with manufacturing activities of all kinds: a small family enterprise producing window-blinds or socks, a medium-sized industrial equipment manufacturer, or a start-up that develops medical equipment.

The IAA states that, according to Central Bureau of Statistics (CBS) data, there are currently about 13,000 such establishments in Israel. Israeli industry employs about 500,000 people, with 60% of the factories located in the periphery. Since its establishment, about 800 applications have been submitted to the Advanced Manufacturing Division, of which about 600 were accepted, with grants totaling NIS 358 million.

The Division is headed by Dr. Malka Nir, a former VP Engineering at Intel, who worked for 14 years at the company's plants in Kiryat Gat, Arizona and California. Dr. Nir holds a doctorate in chemistry from the Hebrew University. Following Intel, Dr. Nir served as the CEO of the Tomer metalworks near Kiryat Malachi, and then for about eight years at Israel Chemicals (ICL), initially as VP R&D in the Dimona area, and then as VP of Strategic Development and VP of Entrepreneurship and Technology at various ICL operations abroad, covering pharma to fertilizers across 54 factories from China and Europe to the United States.

Dr. Nir's team also includes Business Strategy Director Ronit Eshel, a former senior engineer at Intel; Tal Hibner-Perets, who came from Teva; lawyer Roni Bar-On; and Adi Vardi, who is studying industry and management.

In recent months, the IAA has been trying to step up the pace of the Division’s activity, in light of less-than-encouraging data indicating a decline in exports abroad since the beginning of the Covid-19 crisis. According to the CBS, exports fell by 14% in the period January-May of this year, compared with the same period last year. In May alone, exports fell by 5% compared with the same month in 2019. The sharpest declines were experienced by traditional industries, such as food, beverages, textiles and furniture - 17% lower in January to May, compared to last year, and 31% lower in May alone.

Small and traditional factories

The Division’s goal is to improve productivity of those traditional factories and companies, and improve their profitability, as well as expand production in Israel. "We have such significant advantages that, with just a small boost, they could make Israeli a leader in advanced industry, with high productivity and happy, proud people," says Dr. Nir. "We want these people to drive the wheels of the economy. Don’t tell us they’re failing to raise the next generation or attract talent. Since we set up the Division, at least 200 companies have joined our program for improving production process - and from every industry, not just traditional industries like polymers and wood, but aircraft wings, cosmetics and medicines, too. Every factory working with us has improved its performance by 20-30%"

Consultants, preparatory, and practical application programs

To make the transition from traditional to advanced manufacturing, the IAA's Advanced Manufacturing Division enables manufacturing companies to enlist the help of a technological expert who examines the manufacturing facility, structures an innovation program, and works with the factory, step by step, until the plan is implemented. The IAA also supports enterprises that have already formulated an R&D plan, and are now interested in receiving financial support for its implementation.

The Division separates its consultancy into two programs. The first, the R&D Preparatory Incentive Program for Companies in Manufacturing Industry, is intended to assist companies without prior R&D experience in leading innovation processes, or for companies that require focus and guidance with their R&D activities. This can be research for future development of a new product, scouting for a low-cost innovative technology, or making small changes such as introducing robotics, etc.

The next step is MOFET - R&D in Manufacturing Industry, for practical implementation of the improvements at the company or in the product. This is a year-and-a-half long program, at the end of which the company will launch a new product, develop technologies that can be incorporated into the production processes, and more.

Both Pegasus and Elad Technologies have gone through these two programs. Another participant in the program is the Annapurna socks factory from Kibbutz Lehavot HaBashan, which used to manufacture socks "of the three pairs for NIS 20 kind" as Dr. Nir puts it. The company was running at a loss and about to close.

Annapurna joined the incentive program and then the R&D program. Accompanied by Prof. Amos Ophir, a senior researcher in plastics and polymers at the Israel Plastics and Rubber Center, Annapurna changed direction and began producing high-performance fitness socks at NIS 120 per pair. Today, the factory is on its way to launching another new product. "The key is the CEO," says Dr. Nir. "He has to want to move ahead with a burning desire to produce innovative products."

Trending towards Industry 4.0

"There are times when productivity can be improved without R&D," says Dr. Nir. "For example, there are good machines, but they don’t communicate with each other. The expert talks to the production manager and CEO, and especially to the production workers, to learn their process."

This activity relates to Industry 4.0, the integration of technology within traditional industries. Israel’s position as regards Industry 4.0, is not good compared with other developed countries. According to the World Economic Forum (WEF) index for 2018, Israel's level of readiness for the industry of the future ranks 25th, below countries such as France, Poland and Belgium. The world list is led by Japan, South Korea, Germany, Switzerland, China, the Czech Republic and the United States.

Ofakim-based Colorado Ice Cream Company was one company to undergo the process. With the help of mechanization, Colorado improved its output by 30%. "In the first phase, the technology expert mapped out the production floor to observe and alert about what was happening there - for example, a shortage in raw materials or that the deep freezer wasn’t ready. These alerts can be channeled, for example, via mobile phone, to the shift manager, allowing him to respond quickly to malfunctions. The aim is to eventually optimize production line operations," says Dr. Nir.

In another case, a factory manager complained that a machine purchased for about €8 million would shut itself down 60% of the time. "I sent over a friend who sat there for two weeks to try to figure out what the source of the problem was," says Dr. Nir. "She discovered that the machine was installed with a sensor that would give a signal to shut down when the machine’s waste container was 70% full. To solve the problem, a rotating police light was installed on the machine to alert when the bin was full and had to be emptied. This step alone improved productivity by about 80%."

Supporting the transition from development to production

The Division’s third program was launched at the end of August with a budget of about NIS 40 million. Its purpose, among other things, is to encourage companies to produce inside Israel, and prevent them from establishing operations or sourcing abroad.

Dr. Nir: "We have advanced industrial companies in Israel that make physical products, like medical equipment. They build a prototype, and then they’re hijacked by other countries that provide facilities to pilot products and set up factories. We want to keep them here. We want these companies to conduct their trials in Israel, with the aim of establishing production here later on, and being close to development."

Asked whether the factories in Israel are suitable for the type of complex tasks required by Israeli start-ups, Dr. Nir replied that "There is a huge metalworking industry in Israel, from basic to complex metal fabrication and 3D printing. Start-ups can bring in a sketch and the factories will guide them as to the most practical way to carry out production. "

According to the IAA, "The new program is intended for companies that produce tangible products with revenue of less than $70 million per year, or for companies preparing for production - in the process of establishing a production line in Israel." Program participants will receive support and guidance in transitioning from the development stage to the mass production stage, as well as eliminating obstacles in the way of establishing a manufacturing facility in Israel, as part of the cooperation between the Innovation Authority and the Ministry of Economy."

Published by Globes, Israel business news - en.globes.co.il - on September 9, 2020

© Copyright of Globes Publisher Itonut (1983) Ltd. 2020</i

Annapurna sock factory / Photo: courtesy of the company
Annapurna sock factory / Photo: courtesy of the company
Twitter Facebook Linkedin RSS Newsletters גלובס Israel Business Conference 2018